SOUTH Africa’s Oppenheimer family on Friday scotched plans for a buy-back of shares in its mining engineering investment, DRA Global – a development that frustrates the firm listing plans.
The Federal Court in Perth ruled that the buy-back of shares, which are largely held employees, could not proceed, largely on technical grounds.
The buy-back was deemed necessary by DRA in order to settle internal company loans held with its key employees, and to meet investor expectations.
“The result of the judgement is that DRA Global will not be able to proceed with a share buyback proposed as a necessary step in preparing for an intended listing,” a company spokesperson said in an e-mailed response to Miningmx questions.
DRA Global would “… continue to work with all shareholders to achieve this common goal,” the spokesperson said.
The Oppenheimer family owns a 35% stake in DRA Global through its South African advisory Stockdale Street Investment Partners, a company that manages the family’s private equity interests. The shares were first bought in 2016, initially giving Stockdale Street a 40% stake prior to transactions that diluted the stake, with a view to a long-term holding.
According to people familiar with DRA’s plans to list, the company’s management has been unable to agree to Stockdale Street’s demand for a guaranteed exit from DRA when it goes public, scheduled for 2021.
The court action is the second instalment in 18 months of disagreement between Stockdale Street and DRA Global on listing strategy. During this time, Stockdale Street has sought to influence the listing process, according to company sources.
For instance, in 2019 Stockdale Street ousted DRA’s then CEO and introduced its nominee Cliff Lawrenson until DRA shareholders opposed it. At that year’s annual general meeting, a compromise was found in DRA’s incumbent CEO, Andrew Naude, then CFO and executive director.
“The Oppenheimers are used to having their way and so Stockdale Street has been operating as any private equity firm would, by seeking to control the company,” a source unconnected to DRA told Miningmx.
Paul Salomon, a partner in Stockdale Street, declined to comment when approached by Miningmx on May 27. He said the firm didn’t comment “… on the affairs of our portfolio companies”.
Stockdale Street was advisor to E. Oppenheimer & Sons at the time of the investment in DRA. Since then, the Oppenheimer family interests have been dividend between Oppenheimer & Partners, in which Jonathan Oppenheimer, a former Anglo American and De Beers executive, is the principal, and Mary Oppenheimer Daughters, or MODO. MODO represents the investment interests of Jonathan’s aunt and family.
The Oppenheimers trace their family wealth to the founding days of Anglo and De Beers. Nicky Oppenheimer, Jonathan’s father, retired as chairman of De Beers in 2012 when the family sold its stake in the diamond company to Anglo.
The family made headlines in March when they donated R1bn to South African president, Cyril Ramaphosa’s Solidarity Fund aimed at combating the COVID-19 disease and assisting people affected by the economic consequences of the pandemic. MODO additionally pledged R1bn to the fund.